Hello all,
I am nearly 12 months into my proper first year of trading - break even with plenty of swings and roundabouts -and have been stalking you gents for the last 18 months. Great to see you all doing your thing on the forum week in week out. I usually don't ask any questions as happy to learn through discovery/experience, books and knowledge library.
Anyway while it is quiet in here this weekend I thought I may ask some questions.
I have decided to employ a smarter risk profile as I have been 100% in the spec end this year (fools luck that I haven't lost it all) and would like to move more of my portfolio into medium/large cap holdings with bigger volume to trade with and long term growth if not actively trading. I prefer working on a weekly timeframe for making my decisions and happy to hold for months.
So how do you find the companies and is there a forum to keep my finger on the pulse? Is it a simple as researching the ASX 300? guess I have missed that development stage as usually just research tickers from this forum and hot copper the bulk being small cap.
Good on you @willyhill sounds like you've learnt well and in a timely fashion this FY. I'm sure it is a lot more than luck
Lots of people here have asked this question before about where to find these companies and what filters people use, and I'll admit I used to think finding the companies is the easy part... I say that because as you have mentioned there are plenty of companies that come up here on a regular basis that definitely warrant further attention. However, one of the things I have learnt here, or at least there is a constant mention too is over diversifying is a sure way to remove larger gains in the portfolio. So I guess what I am trying to say is if that wasn't evident is be very selective. Someone told me something wise once, and that was along the lines that the hardest thing to do is to say no to money - that being, if you're already fully invested in something and it fits your risk, conviction, rules etc, don't go and lose the focus by selling that very stock/investment to chase the next hottest stock, or good deal.. Many of the wiser people have suggested they made most of their money by having a narrower investment mix....
Alas I realise I haven't really answered your question, what I have merely done is add some of my own reflections that were provoked from your question. Particularly this FY as I know I've found some good stocks, and made some pretty good (I've made some sheet ones too) calls, but I didn't have the investment allocation right, or I was too busy chasing tons of other stocks.. One of the other things I have found is that I felt like I have always needed to have an allocation mix of spec and blue chips/mid cap stocks. But in all honesty I've lost just as much money or seen moves on the mid-cap stocks of the same, if not % of money lost... So I think I've ended up back full circle in realisation that my niche is probably better in the nano-caps and speculative stocks as opposed to the mid-caps or blue chips.
So essentially, what I am trying to say (in a round-about way) is that finding the companies is actually the hard part. There are always going to be opportunities, but I think you have to narrow your own focus to what works for you. Maybe you actually did a lot right this FY to have not lost money. I think it's important you look at your trades as well to asses what went right.
Anyway, I'm sure others will have lots of advice, but there are tons of good subscriptions/newsletters. LiveWire markets is probably a good start as it has a diverse group of writers, where you can find who you like and what fits with your style. But to be honest there are a ton of good posters on HC, most of them are here on this forum, but I would also definitely recommend the Brains Trust on XSO, there's usually good posters there..
Some FA posters that come to mind who are very good at their trade in the mid-caps and larger cap valuation of stocks, and I know I will miss probably a few, (so apologies!):
- @madamswer
- @webbj
- @Ivanovich
- @nordesmic (if we are talking about gold development stories)
But as I said you are probably already on the right track, and there's a lot of quality already here so hope i've helped and I know I will speak on behalf of @Freehold but don't be a stranger and post more often. Good luck!
@willyhill there are lots of ways to find good stocks and there's been a couple of suggestions already. You can try to find them before they run, looking for reversal signals, or you can try to find ones that are already trending and join the wave. Either way there are skills/techniques involved to find them and trade them so you will need to decide which way you want to roll and develop the capability to get good at you chosen path.
There's plenty of potential in the ASX300. A quick scan tells me that 55 stocks in the ASX300 (18%) made a 25% gain in the last 12 months, and 25 stocks in the ASX300 (8%) made a 50% gain in that time and 5 stocks (2%) made 100% gains in that time - see the screen results below:
Looking for these winners at the big end of town is not a lot different to the small cap space imo so the skills used in the small cap space can be used very effectively to screen & find larger stocks that are moving. You may not be looking at multi-baggers like the small cap space (but really, when you think about it what % of small caps actually multi-bag?), but 25-100% gains are not uncommon in a given 12 month period and these stocks have a much lower probability of cap raises and some of the other pitfalls of small caps, so there are benefits to be gained by applying trading skills to larger stocks, not the least of which is diversification between small, medium & large cap sectors, and /or industries.
There are some typos in this article regarding risk/reward ratios but everyone will be able to work out what they are
Regardless, it is an interesting article that discusses the normality of having losing trades and why:
Big wins = good
Small wins = good
Small losses = good
Big losses = bad
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” – George Soros
Looking at the below chart you will see that the bigger your wins are versus your losses the lower your winning percentage can be and you remain profitable.
A primary dynamic of trading that is over looked as traders chase hot stocks, trends, and chart patterns is the importance of taking trades that have the potential to be big wins or small losses. Big losses will kill your account quickly and small wins will do little to pay for those losses. Our trades have to be asymmetric where our downside is carefully planned and managed, but our upside is open ended. This is a crucial element for trading success and has to be understood and planned for.
The risk/reward ratio is used by more experienced traders to compare the expected profits of a trade to the amount of money risked to capture profit. This ratio is calculated mathematically by dividing the amount of profit the trader expects to have made when the position is closed (the reward) by the amount the trader could lose if price moves in the unprofitable direction and the trader is stopped out for a loss.
A big secret that many rich traders know that new traders do not is that the winning percentage for even the best traders is only about 50%-60%. Having big winning trades and small losing trades is a trading edge.
The skill of cutting losses short is a primary driver of a profitable trader’s ability to make money. Big losses are the primary reason most new traders are unprofitable.
With a 1:1 risk/reward ratio and 50% win rate a trader breaks even.
With a 2:1 risk/reward ratio and about a 35% win rate a trader breaks even.
With a 3:1 risk/reward ratio and about a 25% win rate a trader breaks even.
The big takeaway is that the bigger your winning trades are versus your losing trades, the lower your win rate has to be to become profitable. The lower your win rate has to be, the better your odds are that you will be profitable as a trader. You don’t have to be right all the time; you just have to be right big and wrong small.
With a 3:1 risk/reward ratio, you only have to be right over 25% of the time to be profitable. This is a powerful principle to understand.
The methodology for determining your risk/reward ratio begins with first determining where price has to go to show you that your expected outcome is not going to happen. This is the key support level and what you use to place your stop loss. You can set your target for a rally to a key resistance level or a new all-time high. That will be your potential profit target. Your stop loss level is your risk and your target is your reward. Allowing one of the two to play out is the key to skewing your trading to have a high risk/reward ratio and increase your odds of profitability.
The errors of letting a loser run through your stop loss and create a big losing trade or taking a profit quickly and eliminating a big winning trade are what undermines this ratio and creates unprofitable trading in many instances. High winning percentages are difficult for the vast majority of traders, especially with tight stop losses. It is a much simpler path to profitability to ride trends in your trading time frame instead of trying to be right about every entry.
A great formula to use is a 3:1 risk/reward ratio. With this ratio a trader is risking $100 to make $300. If 100 shares of stock are bought for $30 a share and the stop is at $29 then the stock should only be purchased if it is probable that the stock could run to $33. At a $33 share price, profits could be taken or, ideally, if it runs to $34, a trailing stop could be set at $33 to give the stock an opportunity to be an even bigger winner. Remember, though, set the trailing stop to lock in the $3 per share gain.
If you follow this plan, after ten trades your account could look like this:
Lose $100
Make $300
Lose $100
Make $300
Lose $100
Make $300
Lose $100
Make $300
Lose $100
Make $300
Profit $1,000 with only a 50% win rate!
However if you allow losers to run, hoping they will come back so you can take profits on a rebound, then you can get into trouble fast.
What if the stock you were trading fell from $30 to $29, you didn’t stop out, and it kept falling to $20? What if you started wanting to lock in profits at $31 and not let your winner run? The dynamics of your risk/reward ratio would change, leaving you unprofitable even though you had an 80% win rate.
Lose $1000
Make $100
Lose $500
Make $200
Make $100
Make $100
Make $200
Make $100
Make $100
Make $100
Lost $500 even with an 80% win rate!
Remember that you can cut losses even shorter if you are proven wrong before your stop is hit, but at the same time you have to allow enough room for normal fluctuations and volatility in your stop and use position sizing that you are comfortable with for your trading account size.
Allow winners to run as far as possible with the use of trailing stops. You never know when you could have a huge win with the right entry and trend.
Know how much you will risk on any one trade then do not enter a trade where the upside is not at least three times your risk of loss if your stop is hit.
It is not the winning percentage of a trader that determines their profitability, but the size of all their winning trades versus the size of all their losing trades. This is the math that determines profitability.
GreenX your post discusses basic theory on Win rate % versus Profit/Loss Ratio in trading and gambling markets (although various terms are in usage for the same concept). Some practical points in reply:
I'd question whether spec stocks are best traded with these sort of mathematical controls. But if you are trading a liquid market, particularly with some sort of leveraged instrument then your above parameters should be known and used.
But the article doesn't emphasis enough tracking both your actual Win rate and Profit Ratio (and anyone using stops and trailing stops as suggested above will likely find their actual outcomes vary adversely from the theory). You can start with a 3:1 Profit ratio, but parameters for trade entry need to be calibrated to the actual past performance of the trading methodology you use. For my options trading I have win rates between 40% and 60% varying with the state of the markets, with higher win rates in higher volatility periods and I've learnt to pull back trading in low vol periods. I calculate my profit/loss ratio at trade entry to a target multiple of 2.2 to 3 times my potential loss to decide if I'll take the trade. It's hard to get a 3x premium multiple to target in directional option trades.
The other point that much of the text books miss when discussing Win Rate and Profit Ratio is consideration of the third variable of Position Size. If you get caught in switches, varying your position size with each trade, then you could make losses on your bigger trades and wins on the smaller trades. For the maths to work as your article discussed, there is an assumed fixed position size. However, most experienced traders will still want to pyramid winning trades. I do and I believe Soros does. So that introduces a variable where you need to balance your level of pyramiding to the Win Rate of your system to minimise switching costs.
I would add that its important to define what the risk:reward ratio is actually based on. The way I've seen most people use the ratio is based on the following:
I used to do this too. The problem I have with this approach is while the risk is known (you can absolutely know what price you will pay to enter and what price you will place your stoploss at), the reward using this approach is totally hypothetical - usually based on a resistance level (for longs) or support level (for shorts), but there is no way of knowing whether price will actually achieve the target.
Therefore using this approach the risk:reward ration is a hypothetical risk:reward if the price achieves the target.
The problem with the above is there is no validation of whether that target price is realistic - it is a subjective choice made by the trader at the time of planning the trade. Experienced traders will have a better understanding of whether that target is achievable and less experienced traders will be less accurate, but in either case the selection is hypothetical.
The approach I've learned which I believe is more sound is based on the following:
Using statistics from back-testing a sufficiently large sample to be robust (and then validate through back-application to an out of sample data set) determine for a particular setup what the average outcome is for that setup, i.e.:
1. What is the number of wins and average gain per winning trade
2. What is the number of losses and average loss per losing trade
3. From the above calculate what is the overall average win per trade (assuming you have developed a trading plan that statistics show generates a positive average outcome per trade)
Then when you plan a trade you can plan it based on:
1. The risk which is based on your selection of stoploss (i.e. again = entry price - stoploss price)
2. The potential reward which is the overall average win per trade (again, assuming an average positive outcome per trade)
Then you really have a validated estimate of risk: reward but even then it is an average, i.e. don't expect that result each trade - some will be winners, some will be losers, but its the average of all of them that counts.
Imo this approach is more realistic than the other more commonly used approach.
I don't like the maths in that article. This is a crude chart showing rate of return for a given "success rate". The blue line going left to right and up is a break even at 10% loss; ie you limit losses to 10%. If you increase that loss limit the line moves to the left at a steeper angle, if you reduce the loss limit it moves to the right at a shallower angle. The lines going left to right and down are the required rates of return for a given "success" rate (the lower scale).
So if you have a 40% rate of picking "winners" you need to average 30% rate of return to break even. The worse your ability at picking winning trades the greater your average rate of return needs to be.
The maths from that article; "A great formula to use is a 3:1 risk/reward ratio. With this ratio a trader is risking $100 to make $300. If 100 shares of stock are bought for $30 a share and the stop is at $29 then the stock should only be purchased if it is probable that the stock could run to $33." Cost of shares (disregarding brokerage) $3000, sell at $33 equals a net profit of $300 or 10% rate of return. You would need to have a better than 60% succes rate simply to stay solvent
Thanks for your response @Orwell , I always like reading your analysis and input.
I agree that the article is very simplistic and doesn't take into account many real world variables such as the types of markets different R/R ratios may work in, position sizing, personal financial and psychological situations etc.
I feel it is always so important to read what others have to say and then use, disregard or modify the content to suit your own trading requirements and goals.
For many traders that consider R/R ratios I suspect they do so on a case by case basis to determine initially if a trade is worth an entry and position size. Position size may be fluid and change throughout the duration of the trade and R/R ratios may change depending on trailing stops and if the trade is obeying "allowable" parameters for a particular metric(s) etc. However, I think the most important thing is to never let a position go below the pre-entry R/R ratio level. Nothing wrong with letting those winners ride but letting those losing trades go lower than what you were initially prepared to lose on the trade can be a financial and psychological disaster!
Thanks for your link to the babypips site @gamefisherman there was another simple but interesting blog on there about R/R ratio which actually starts with the same quote from the one I posted on Friday But again, it discusses confining yourself to a particular R/R ratio based on win rate.
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” – George Soros
Meet Alex.
Alex’s trading performance has been choppy at best and he’s looking for ways to achieve consistent profitability. After scanning trading-related forums, Alex stumbled upon the term “reward-to-risk (R:R) ratio,” and learned from other traders that using a high R:R ratio would increase his chances of booking profits.
He tries it on his long EUR/USD trade and aims for 50 pips using a 25-pip stop. Unfortunately, the pair only moved 30 pips in his favor before it dropped back down to his initial stop loss.
Thinking that his stop was simply too tight, he revises his strategy and widens both his target and his stop. He now aims for 150 pips with a 50-pip stop.
But, since Alex is not a good trader to begin with, he misjudges EUR/USD’s upside momentum and the pair only moves 55 pips higher before dropping back down to his entry area and he ends up closing with only a 5-pip gain.
Does Alex’s story sound familiar to you? If it does, don’t worry. It’s common enough for newbie and pro traders alike to use wide stops and targets to increase their chances of being right. However, as the scene above suggests, this strategy can also be detrimental to your trading account.
Remember that reward-to-risk ratio is simply the comparison of your potential risk (distance from your entry to your stop loss) and your potential reward (distance from your entry to your profit target).
In the example above, Alex first used a 2:1 risk ratio before he bumped it up to a 3:1 R:R ratio. If the latter trade had worked out, Alex would’ve bagged pips three times the size of what he risked.
The main appeal of higher risk ratios is that it increases your trading expectancy, or the amount you gain (or lose) per trade. This means that there’s less pressure with every loss, as you’ll only need to be right a few times to cover the losses from your other trades.
Unfortunately, a lot of traders use higher risk ratios to cover poor trade execution. This is problematic because it’s not that easy to make risk ratios work for you to begin with.
For one thing, aiming for a higher/lower profit target would mean that price would have to travel farther than in setups with lower risk ratios. Using stops that are too tight, on the other hand, would kick you out too early and too often to be sustainable.
So, how do you find a R:R ratio that works for you?
While there’s no Holy Grail to finding the perfect reward-to-risk ratio, a good place to start is to look at your win rate.
It makes sense, don’t you think? Before you can expect your risk ratio to work for you, you must first confirm that you CAN win often enough to eventually hit that potential reward.
For example, using a 1:1 risk ratio means that your potential profit is as big as your potential loss. This will only work out if you’re right AT LEAST half the time historically.
Using a 3:1 risk ratio, on the other hand, means that potential profits are three times as large as potential losses, so you only have to be right at least 25% of the time to be profitable.
Here are handy formulas if you want to play around with win rates and risk ratios: Required risk ratio = (1 / win rate) – 1
Minimum win rate = 1 / (1+ risk ratio)
Using the formulas above, we can confirm that the required win rate for a 1:1 risk ratio is at least 1 / (1+1) = 0.50%.
Likewise, if you only have a win rate of 40%, then you’ll have to find trades that have at least (1/0.4) – 1 = 1.5:1 reward-to-risk ratio to be sustainable in the long-term.
Taking it one step further, we can see that it IS possible to use less than 1:1 risk ratio provided that you have a fantastic win rate. For example, you can use a 0.4:1 risk ratio if you win your trades at least 1 / (1+0.4) = 71% of the time. Easy peasy, right? RIGHT?!
Before you compute for a more personalized risk ratio for you and stick to it like glue, you should keep in mind that using win rates to find a good risk ratio barely scratches the surface.
If you want to get a more appropriate ratio for your trade, you can also get information from your expectancy, the current trading environment (high risk ratios fare better on trends), and the currency pair’s average volatility range.
As with a lot of things in forex trading, there’s no single reward-to-risk ratio that will work best for every trader and every trade. But, as long as you mind your odds and work on managing your risk, then you’ll eventually find a way to make profits consistently.
@Green X I thought I'd add another contribution to the risk:reward discussion:
One other factor that should be taken into account to determine whether a risk:reward ratio is one that a trader is happy with is not just the risk:reward ratio but also the shape of the equity curve.
I will give a practical example using AQX which came up earlier this weekend:
The weekly chart (see below) presents a bullish engulfing candle completed last week as shown. Based on this buy signal a trade could be placed with an entry at 0.052 (the break of the bullish engulfing high) and a stoploss at 0.039 (the break of the bullish engulfing low).
Let's say we are prepared to risk $1000 on the trade. Based on reward:risk ratios of 1:1, 2:1 and 3:1 the targets would be:
1:1 target price = 0.065 = $1000 profit if hit
2:1 target price = 0.078 = $2000 profit if hit
3:1 target price = 0.091 = $3000 profit if hit
in each case if the stoploss is hit the loss is $1000.
Now let's say we take this type of trade 10 times (i.e. same setup with same reward:risk ratios on different stocks). Theoretically, the reward:risk ratios give us the following results over the course of 10 trades:
In other words, of R:R = 3:1 a strike rate (% wins) of at least 3 out of 10 is needed to make a profit over the 10 trades. If R:R = 2:1 the strike rate needs to be at least 4 out of 10, and for 1:1 at least 5 out of 10.
So traders might be happy with that, but what about the sequence of wins & losses. If working to a 3:1 reward:risk ratio, the wins & losses over 10 trades could pan out as per the following graph:
So the trader in this case has achieved at least 3 wins out of 10 trades, and started off really well with 2 wins in a row, but then there was a string of 5 losses before another win and finally after a further 2 losses the trader completed the 10 trades with a final profit of $2000 for 10 trades, or an average of $200 per trade.
Would or should the trader be happy with that?
Personally I would not. Not because the final profit was too small, but because the equity curve shows a distribution that is "lumpy", i.e. I am not achieving consistent wins (which is what I prefer rather than a few big wins between many losses).
Now one might say well that's all theoretical, but let's look at a more practical example, I will show the statistics on a trade setup that I use over the course of 100 trades, in 2 scenarios:
1: P3 = trade is closed 3 weeks after opening
2: P13 = trade is closed 13 weeks after opening
In both scenarios the reward: risk ratio is exactly the same, and all other trade parameters are the same also, except the timeframe.
The 1st obvious thing is that the 13 week trade produces a final profit of just over $40,000 whereas the 3 week trade produces a final profit of only $25,000. The 13 week trade also has quite a few big wins - but then it has a sequence of consistent losses drawing down on the early profits made, before late in the period of time some winners push the final profit to a new high.
Personally I prefer 3 week trade for the following reasons:
1. Its final profit is not as high but it produces winners more consistently - the reason being that during the sample period there was a bear market causing a high loss rate when the trade was left open 13 weeks. But even during that bear market the 3 week trade captured a lot of reaction rallies - hence proving to be a more robust trade in different market conditions.
2. The 13 week trade is more capital intensive - I have to hold positions open for 13 weeks rather than 3. So if I can find sufficient trade setups for the 3 week trade then actually over the course of 13 weeks I can trade 4 times as many of those 3 week trades generating not $25,000 but $100,000 using the same capital that would otherwise be tied up for the 13 week trades.
So risk:reward is one factor to consider, but there are other factors (the above is not exhaustive) to consider as well when choosing how to structure one's trades.
Longer holds, but with a stop loss moving up as time goes on. 13 weeks is a long time, if all the paramaters are the same it may be the case that the potential upside not fully being captured in scenario 2?
I lookes at 8 different timeframes when I do my modelling, one of which is a trailing stop. There is a trade-off between return and strike rate versus timeframe - the return is higher for longer timeframes (which let the runners run) but the strike rate is lower - more stoplosses hit - so a less smooth equity curve.
A trailing stop does produce a marginally better final outcome than the 3 week hold, but marginally less consistent. The number of stoplosses hit is marginally lower but the overall number of losses is slightly higher. This is because as the stop is moved it means the initial stop will no longer be hit. But if the trailing stop is hit it is always hit at the low of a candle whereas exiting the trade at the close of a week the close is usually not at the low.
A hybrid I have also tested is to split each trade into 2 positions and set the 1st position to take profit at the 1:1 R:R level so worst case is if the 2nd position hits the initial stop the whole trade is break even. Another option is to move the 2nd position to a break even stop after the 1:1 R:R level is hit. Both options produce a smoother equity curve - smaller wins but more consistent.
"This is a discipline that is incredibly useful, especially in volatile, crazy markets," the "Mad Money" host said.
Trading is all about profiting from short term fluctuations in price, which can be caused by an unexpected catalyst or a wild market. In Cramer's opinion, knowing proper trading strategy, including how to trade around a core position, will make you a better investor.
Cramer outlined the steps to trading a core position below.
First, pick a stock that you like and believe will go higher in the long term. Think of a company with solid fundamentals that can stay strong when the market becomes volatile and will go higher with a little patience. Cramer recommended establishing a position in the stock by buying shares in increments. Buying it all at once is just plain arrogant, he said.
For instance, if you want to own 100 shares of your favourite stock over time, buy the stock in increments of 25. Buy it four times over a span of weeks or months until you reach 100 shares.
For those who want to live a little and trade, Cramer says home-gamers can make money, too, if they trade correctly.
To begin trading on a core position, every time the stock jumps 5 percent, sell 25 shares. Keep shaving a little off the top to bring in some profits, a strategy called scaling out of a stock.
If Cramer loves a stock, however, he likes saving the last 25 shares.
The next step is to wait until something happens to the stock that knocks it down to the same price where you first bought it, as long as the news isn't specific to the stock. When the stock comes down, you start to buy it in increments again. This might appear to be small potatoes, but over time, the profits add up. Up 5 percent and sell 25 shares, then buy it from where you started. The cash in your pocket will start to accumulate.
"A lot of people think that trading is incredibly exciting, and it can be, but if you're good at trading around a core position, you should be pretty bored. All you're doing is watching the stock move, and trimming or adding to your position accordingly," Cramer said.
The purpose of this technique is to avoid putting yourself in a position where you have too much money on the table for a stock. That way, if the stock takes a hit and goes down or if you have too little on the table to take advantage of upside, you are prepared.
How about as topic this weekend we talk about Hot Chopper??
How do you use it?
What do you like and dislike about it?
Does it help with your trading?
What to look out for? (eg are there warning signs on HC that help you trade?)
What are your favourite sub topics on the forum and why? (There is a lot)
A few things I like about HC are:
The positive feedback you can get from other members. When I post a question, comment, or share an idea most of the time I get responses back. Some of the feedback is both polite and helpful, unfortunately other responses are both downright rude and belittling. Even just reading through past comments and questions can be quite educational but you really need to be able to sort out the genuine posters from those who seem to have not developed a viable trading strategy yet.
For example, those who have bought at the top and post about buying more as the share price crashes while referring to those selling as idiots seem, generally speaking, best avoided. The tone a content of posts can also help act a a barometer to gauge the psychological state of the "herd".
Sometimes a comment or post lead to deeper and more meaningful connections with other members. Over time these connections can grow into constructive relationships and you can develop a great respect for certain posters, especially those who have a balanced view on a certain stock the stock market in general. Connections with other traders have helped me become a better trader.
HC is a great way to share ideas, news stories, and charts with other traders. A minefield of information and all for free. I find the more I share the more I get in return. I think givers gain when it comes to online trading forums.
Poster Caduceuas
link 25464186
I have found HC very helpful, especially the STT section
Your post motivated me to finally join.
Have enjoyed reading the threads for almost a year now and I really like the range of different perspectives posters bring to the discussion.
I don't know that I could say HC has directly helped my trading, 2017 so far has been very easy to lose money in the spec end, where I like to trade. It has helped me however get a sense for where the market is heating up and where money might be moving. Did well on MM stocks, but not on TIN (too early?), missed the Lithium and Cobalt runs, but imo we are in for another strong run in Li and Co, especially Cobalt.
My main interest is in tech stocks so these are the areas I mostly lookout for. I hold DTZ and CFO, both of which I have built up my position over time, as they continue to drop in SP. I was also interested in UUV, but I held back participating in the IPO because of the behaviour or other techs stocks I held, and the HC conversation around them, and in that respect HC did infact help me to retain capital in this instance.
My favourite sub topic is cryptocurrency, it is still in its infancy and imo holds much potential, especially the Enterprise Ethereum Alliance, https://entethalliance.org/members/
The members, contributors, developers and supporters is very impressive and growing.
JPMorgan Intel Microsoft Toyota Samsung and over 100 others.
And I am a big fan of the decentralised applications concept
But again, it discusses confining yourself to a particular R/R ratio based on win rate.
In other words, of R:R = 3:1 a strike rate (% wins) of at least 3 out of 10 is needed to make a profit over the 10 trades. If R:R = 2:1 the strike rate needs to be at least 4 out of 10, and for 1:1 at least 5 out of 10.
